Property sales surge on demand

TAXES:：Taipei’s new deputy mayor is pushing for taxing properties based on their actual selling price, but added that supporting measures should be in place first

By Crystal Hsu / Staff reporter, with CNA

Fri, Apr 05, 2013 - Page 13

Property transactions picked up by a double-digit percentage last month compared with the same period last year, driven by real demand and investment as the holiday-effect waned, a real-estate broker said.

A total of 19,259 residential and commercial properties changed hands in Taipei, New Taipei City (新北市), Greater Taichung, Greater Tainan and Greater Kaohsiung last month, surging 71.2 percent from February when the nine-day Lunar New Year holiday trimmed trading volume, data from local governments showed.

The figures represented an increase of 12 percent in Greater Taipei, 5.6 percent in Greater Taichung and 10.6 percent in Greater Kaohsiung compared with March last year, as buying confidence rose amid an improving economy and low interest rates, Andy Huang (黃舒衛), spokesman for Evertrust Rehouse Co (永慶房屋), said in a statement.

In the first quarter, property transactions rose 16 percent year-on-year in the five special municipalities, thanks to ebbing unease about unfavorable government policies, notably the special sales levy and price-registration requirements, Huang said.

In Taipei, property transactions totaled 3,333 units last month, up 61.2 percent from February and 18.5 percent from a year earlier, as buyers sought refuge in real estate after Japan weakened its currency to stimulate economic growth and central banks in the region, including in Taiwan, followed suit, Taiwan Realty Co (台灣房屋) said.

“Asset allocation needs accounted for the increasing popularity of small apartments in the capital because they are relatively affordable and generate stable rental yields,” the broker said.

In New Taipei City, property transactions jumped 67.5 percent month-on-month and 14 percent year-on-year to 6,135 units last month, as extensions of the MRT system attracted more people to take residence in Sijhih (汐止), Lujhou (蘆洲), Linkou (林口) and Tamsui (淡水) districts, Evertrust Realty said.

Property sales spiked 70 percent last month from February in Greater Taichung as capital flowed to districts where construction of an MRT and other infrastructure facilities is under way to take advantage of prospective value gains, Evertrust Realty said.

In Greater Kaohsiung, property deals reached 3,750 units, rising 85 percent compared with February and up 10.6 percent from a year earlier, the local government said.

The nation’s largest broker by number of outlets expects property trading to increase this quarter on the back of recovering confidence.

Separately, Taipei Deputy Mayor Chang Chin-oh (張金鶚) said earlier this week that taxing properties based on their actual transaction price was an inevitable trend, but that supporting measures have to be implemented.

Chang, who taught land economics at National Chengchi University prior to taking office on Monday, wrote on his Facebook page on Tuesday that such a taxation system is needed to solve the problem of “housing injustice” in the nation.

However, the government will first have to conduct a comprehensive re-assessment of property and land values across the nation, work on integrating the property and land value tax, and study related supporting measures, he said.

At present, homeowners have to pay both a property tax and a land value tax.

The Ministry of Finance said that until a single property and land value tax is introduced, it would be difficult for the government to impose a property tax based on actual selling prices.

What the government can do during the transition is to gradually increase current land values during assessments to reflect their market price, the ministry said.

Chang said he agreed with the ministry’s idea, but he also recommended that the government adjust tax rates separately for properties for personal use and for lease, instead of raising tax rates across the board, to avoid increasing the burden on the general public.